Nuvama Institutional Equities has picked three stocks to bet on in the current market condition. These include ICICI Prudential Life, AWL Agri Business, and HDFC Life Insurance. The brokerage house expects one of the stocks to give a return of as much as 51% in the period of next 12 months. Here’s a detailed analysis behind choosing these stocks-
Nuvama on ICICI Prudential Life: Value of new business to rise 2% by FY28
The brokerage firm raised the target price on ICICI Prudential Life slightly to Rs 770 from Rs 760, while maintaining its ‘Buy’ rating on the stock. The new target price implies an upside potential of 15%.
The insurance company’s total Annual Premium Equivalent (APE) declined by 5% year-over-year (YoY) in Q1FY26, which was led by a 9.3% YoY drop in retail APE. The Group APE grew 18.9% YoY as the group savings segment surged 53.7% YoY. Protection share rose 390 basis points (bps) YoY, aiding Value of New Business (VNB) margin of 24.5% (+50 bps YoY) that was up 170 bps versus FY25 as product-level margins were similar to FY25 levels.
Consequently, ICICI Prudentail’s VNB fell 3.2% YoY to Rs 460 crore, compared to the estimate of 0.8%. However, the management reiterated its commitment to delivering absolute VNB growth. “We are fine-tuning APE/VNB margin estimates, resulting in a change to our FY26, FY27, and FY28 VNB estimates by -0.1%, +0.8%, and +2.1%, each,” said Nuvama.
Nuvama on AWL Agri Business: Strong revenue growth in Q1FY26
Nuvama retained its ‘Buy’ rating on AWL Agri Business (AWL), with a target price of Rs 397, implying an upside of 51%. The company posted a revenue growth of 20% YoY Q1FY26, driven primarily by higher realisation in the Edible Oil segment.
However, EBITDA declined sharply by 41% YoY as input costs remained elevated. A commodity derivative gain of Rs 150 crore partially offset the impact of this steep EBITDA drop. Volume fell 5% YoY due to underperformance in rice and sluggish Palm sales. Gross margin declined 340 bps YoY to 9.4% and EBITDA margin dipped 222 bps YoY to 2.1%.
“Factoring in a weak Q1, we are cutting FY26 and FY27 EBITDA by 6.8% and 5.3%, respectively,” said Nuvama.
Nuvama on HDFC Life Insurance: VNB and APE way higher than estimates
Nuvama kept the ‘Buy’ rating unchanged on HDFC Life Insurance, with a price target of Rs 920, an upside of 22%. The insurance company’s Q1FY26 total APE grew 12.4% YoY, compared to Nuvama’s estimate of 0.8%. Both retail and group businesses grew evenly at 12.4% YoY and 12% YoY, respectively.
Despite surrender value impact and lower fixed cost absorption, HDFC Life reported a 7 bps YoY expansion in VNB margin to 25.1%, resulting in a Q1 FY26 VNB of Rs 810 crore, which was up 12.7% YoY. This is 1.9% above Nuvama’s estimate. The company aims to grow VNB in line with the top line in FY26.
“We forecast HDFC Life would deliver APE/VNB growth of 12.9%/15.2% in FY26,” said Nuvama.